ASIA CREDIT CLOSE: Asian credits stable despite volatile stock market

“Credits were relatively stable compared to stocks today. Many bond investors and traders are already on the sidelines ahead of year-end so trading volume was low which restricted price movements,” a Hong Kong-based trader said.

Indian Railway Finance Corp’s US$500m 3.835% 10-year Green bonds, priced at Treasuries plus 145bp, traded 1bp-2bp wider in the morning but reversed after the local bid came in the afternoon to get around 3bp tighter, according to the trader.

Qingdao Conson Development’s US$400m 3.875% 3-year notes, priced 200bp wide of Treasuries, were 5bp tighter at the beginning but hovering at reoffer in the afternoon.

Hong Kong banks’ notes traded up slightly on news that Moody’s has changed its outlook for the city’s banking system to stable from negative.

The rating agency expects that their operating environment will benefit from stronger global economic growth in the next 12-18 months.

Wing Lung Bank’s 3.75% Tier 2 rose 0.23 point to a bid of 100.347 while Chong Hing Bank’s 3.876% T2 was up 0.08 point to a bid of 99.038.

In the high-yield segment, Reliance Communications’ 6.50% 2020s rose 0.525 point to a bid of 36.15 despite a Reuters news report that ICBC and China Eximbank plan to support a move by China Development Bank to send the Indian telecom operator to bankruptcy court as they seek to recover about US$2bn in debt.

Anton Oilfield Services’ 9.75% 2020s were unchanged at 99.75/100.25. Moody’s yesterday upgraded the Chinese company’s rating to B3 from Caa1 following the expected completion of its debt exchange offer and new note issuance.